Robina Gokongwei-Pe On Economics, Kidnapping, Chinoys and Business

Here’s an excerpt from a speech given by Ms. Robina Gokongwei-Pe to the students of the UP School of Economics. Interesting insights on business, economics, and life as a Chinese-Filipino and entrepreneur in the Philippines:

The first theory is the ubiquitous law of supply and demand. The reason I failed to graduate from UP was that I was kidnapped on the way to school in September 1981, and guess what, right on the day I was supposed to take Prof. Canlas’ exams.
Contrary to the 2000 movie Ping Lacson, Supercop, I was not jogging on the grounds of UP wearing a midriff when I got kidnapped. In the first place I didn’t have the body then to wear that outfit and never will. By the way, the actress who played me in the movie was Angel Locsin, and I hope you didn’t invite me to make this speech because you thought I looked like her. (Of course, deep inside, I wish I did.)

By the way, yes, it was then Lt. Col. and now Senator Ping Lacson who rescued me after seven days in captivity. He literally kicked and broke down the door, just like you see in the movies.

At that time, 1981, the kidnappers demanded P7 million in ransom money. Nowadays, any Tom, Dick and Harry would kidnap you for as low as P300,000. And that’s the law of supply and demand. The price has gone down to P300,000 because there are so many unorganized criminal gangs who are willing to take anything, and the victims are more willing to give since it’s not worth your life trying to haggle if it’s only P300,000.

You must be wondering whether the kidnappers were caught. Which brings me to the second theory: the theory of competitive advantage…

The mastermind was the son of a judge from Cebu. The judge from the lower court found him guilty, but when the case came up to the Supreme Court, the justices acquitted him. It’s only in the Philippines where you see the mastermind of a kidnapping gang get acquitted, and I wonder whether it has to do with his being the son of another judge. That is what you call competitive advantage.

The third theory is cost-benefit analysis. In 1989, we acquired the venerable national daily Manila Times from the Roces family. Sometime in 1998, my editors, who incidentally came from UP, wrote a headline that annoyed then President Joseph Estrada.

The story was about how the government was unwittingly led to sign an anomalous contract with IMPSA, a foreign group. Take note, this was in 1998, so if you’re thinking that this is ZTE, this is not ZTE.

Anyway, I didn’t even know what the story was all about, as my policy was to leave the editors to do their job while I handled the business side. I ended up getting sued by the president of the country, and for several nights, I thought hard about the future of the paper. As an economist would say, “Do a cost-benefit analysis.” The benefit was that it was a well-respected paper with a well-respected staff. However, the cost was that I was sure to die early, thinking about getting sued day in and day out. I didn’t want the staff to deal with a boss suffering from a nervous breakdown, and I didn’t want the readers to think that we were now forced to change the newspaper’s ideals to avoid any more lawsuits, so with a heavy heart, we sold the paper.

Running a well-respected paper was part of my efforts at being an instrument of meaningful change in society. So much for the effort. I figured, hay naku, magtitindera na lang ako.

Anyway, five years after, the government ended up suing that same foreign group, IMPSA, for leading them to sign that anomalous contract. By that time, I was already leading a less-turbulent life managing our retail group, and I left my sister Lisa to continue with publishing. She was smarter than me. She put up the highly successful Summit Publishing, which includes some staples such as Cosmopolitan and FHM. This is where I can say that when it comes to sex, the demand is always greater than the supply.

The fourth concept is about monopolies and oligopolies. A UP alumnus recently branded our family as oligarchs in the airline industry. In my economics textbook, an oligopoly happens when only a few players dominate the industry and set the price of goods unreasonably high. I do not know how we can be oligarchs if we give opportunities for people to travel more often by providing one-peso fares. Setting the price of goods with one-peso fares? Maybe he wants us to lower it to 50 centavos.

Let me go on to the fifth and sixth concepts, which I believe are the most important because they have to do with what you are going to do after graduation. Specifically, what you think you can do after obtaining an economics degree. In truth, you can do anything you want.

In fact, I asked the student reps over lunch why they majored in economics, and they said it was because they had the impression that you can do anything with an economics degree, and I told them they were right.

In fact, I wonder who among you were like me and decided to major in economics because you wanted something close to business but not take up business administration, and you thought that economics and BA were almost the same. It turns out that they’re related in some ways, but in most ways they’re totally different, and it’s a good thing I didn’t major in BA: I barely passed accounting.

My dad didn’t force me to take up BA after I graduated in high school in 1978 because he said that I would learn business anyway when I entered business, so I should go learn something else. If I had the choice, I would’ve gone into anthropology or veterinary medicine, but then it was uso among the Chinoys at that time that you either majored in pre-med because you were going to be a doctor, or in business because you were going to work in a bank. It seemed that Chinoys were headed to only two professions at that time.

I was the typical Chinoy who just followed where everyone went.

Anyway, back to my fifth and sixth theories — the theory of opportunity costs and the law of diminishing marginal returns. I know that when you start looking for a job, you will do two things — you will compare what each company is offering you, and you will compare your pay with your batchmates. Taking the first job offer that comes your way implies an opportunity cost of losing the chance of making more money. You wouldn’t want to lose that opportunity to make more money, would you?

Six months into the job, either one of two things can happen, or the two may happen at the same time. Either you will be thinking about whether this is the job you really want and you will keep on meditating about it to the consternation of your boss, or another company will try to poach you by offering better pay and benefits, or both.

Now take note that you belong to Generation Y, which the latest issue of The McKinsey Quarterly describes as people “born after 1980 — whose outlook has been shaped by, among other things, the Internet, information overload, and overzealous parents. HR professionals say these workers demand more flexibility, meaningful jobs, professional freedom, higher rewards, and a better work life-life balance than older employees do.

“People in this group see their professional careers as a series of two- to three-year chapters and will readily switch jobs.”

Emphasis on “readily switch jobs.”

So on to theory No. 6, the law of diminishing marginal returns. Being a member of Gen Y, you may have the habit of moving from one job to another, always grabbing the one that will pay more. You have the right not to miss out on these opportunity costs, but take note that if, by the time you’re 30, you show this three-page résumé listing that you had 12 jobs in eight years, you can be sure that you will experience firsthand the law of diminishing marginal returns. On your 13th job interview, you will be worth what your rate was when you were 22. No employer will dare hire you, because he thinks you will just run off again after six months.

Assuming (which, by the way, is an economist’s favorite word) that you decided to become an entrepreneur instead of seeking employment, then bravo, you made the right decision.

Entrepreneurship is a topic that Dean de Dios wanted me to talk about, but I told him that I wasn’t an entrepreneur. I am only managing one of my father’s businesses and using company money, not my money. But Dean said that, in any case, he knows more people who have spent all their fathers’ wealth and run the business into the ground much faster than it took me to build my father’s business. So, thank you for your kind words, Dean.

I am not an entrepreneur — it is my dad who’s an entrepreneur — but let me say something about it. I think the reason few people go into entrepreneurship especially when they come from top-tier schools like UP is that when they want to open their own taho cart, for example, people around them would tease them and say, “Ano ka ba, galing kang UP, magtataho ka lang!”

My answer to that is “E ano?” At least you have something you can call your very own.

You are not beholden to anyone but yourself, and yet you bring joy to society because you give people a product that they like. After all, big businesses started by being small once. Big business didn’t start out big: there’s no such thing.

Let me give you, though, one tip about running a business, and one more economic theory to go with it.

It’s about the theory of market competition. There’s such a thing as fair competitors, and there’s such a thing as desperate competitors. Both are troublesome, but you know fair competition is part of free enterprise. As for desperate competitors, you worry if this country is retrograding.

You were not born yet when the story of my kakambal na ahas who was half-woman, half-snake came out when we opened our second Robinsons Department Store branch in Cebu in 1985. My kakambal was supposed to be the source of our wealth as she laid golden eggs. She was supposed to be hiding under the floor of the fitting rooms, and every time a beautiful woman would enter, the floor would open and she would land right inside the mouth of my kakambal na ahas. I have no idea who started this incredible story, but I have to tell you that some people believed it and even started staring at my legs to see if there were any signs of snakeskin. A few people still ask me about it, and I have to tell them na naging handbag na ho sa Robinsons Department Store.

Thank goodness there was no Internet yet at that time, or you would start receiving photos of me with a snake’s body and my kakambal na snake with a woman’s legs. How do you deal with these dirty tricks? Nothing, just keep quiet and let the story fade away. Or better still, make a joke out of it. And that is what you are going to face on a regular basis once you step out of school. Someone will be out to kill your product, out to get your job, out to grab your boyfriend. And if you’re an unlucky bitch, maybe all at the same time! But in the end, you will come out a stronger person, and better still, end up with a much better boyfriend.

27 Responses

hi ma’am is the rumor true about y0ur brother robinson?? that is a half snake and half human? how true is it?? how many are you in the family? if yes were is he now? what is he eating. im just really curious about this. ma’am no offend but i do believe it. please answer my queastions.. thank you ma’am

I guess it’s true. One of the engineer of the constructed R. Mall spilled his secrets. Meron daw talaga underground yung Robinsons na pinagawa every mall…He didn’t seen though the Snake pero he had seen a panel truck covered na dumadating everytime mag blessing ng first opening ng mall…

Being an Entrepreneur—Not applicable for most Filipinos. For someone like Robina Gokongwei, it would be a stupid move if she chooses to become an employee. Her father owns and runs the biggest corporations. She has the advantage of business techniques and strategies(from dad), almost unlimited cash for capital and more cash for all possible operation mistakes, and the clout and connections in different industries.

This is not the case for most Filipino university graduates. The chances of business success with almost no capital to start with, no excess cash for operations mistakes, and no industry connections, no mentor is kinda slim. Most Filipinos also have to pay the bills right away. Jobs offer that security, predictability, and consistency of cash inflow. A typical Filipino is more likely to succeed as a professional–a doctor, lawyer, accountant, nurse.

personally, i believe race has no bearing on becoming an entrepreneur. we have a lot of Filipino entreprenuers, very young and vibrant. but there are also Filipinos who do not believe they can be business owners simply because they are Filipinos. This is the reason why the country finds it difficult to move forward. I believe it takes courage, will and belief. Not every Filipino or even Chinese Filipino can be an entrepreneur. It takes a certain personality–regardless of race or background to be an entrepreneur. You need to be courageous because there are competitors, obstacles, challenges that will push you to breaking point. That’s why belief is very important. If you believe in your product, service or whatever you are offering the world, you will continue to better it and push it, even when times are difficult and your product is not selling. You need to make it past the eleventh hour. And only your will will give you the courage and support the belief you are fighting for. The money…well, that’s part of the ball game. Start small. That is correct. Go online business. Direct selling. Get more training. Only by starting small–kahit rationing sandwiches lang ang gawin muna…can you learn to handle the big business later on. If you want to be an employee forever, don’t blame it in being a Filipino. Blame it on your belief. Dahil diyan lang ang paniniwala mo, hindi mo na rin i-cha-challenge ang sarili mo na lumabas sa comfort zone mo. Being an employee provides immediate need…but seldom will make you rich. Kaya kung hanggang immediate needs lang din ang tinitignan mo, hanggang pagiging employee ka lang. Nothing wrong there…just don’t blame it in being a Filipino. It has nothing to do with being a Filipino….or being born poor. or in middle class. or in a filthy rich family. Hindi namamana ang business acumen. A lot of successful businessmen have children who have no idea on how to run a business. It is learned, taught, and to some extent, God-given talent.

some people are born with a snake, some people are born without brains. parang napanood ko ‘to sa telenovela, yung rich vs poor ang drama. You know most Chinoys started from scratch and even yung mga bagong salta, alot of them took big risk coming here not knowing the language or culture. Some came here with only suitcases stuffed with things to sell and then they go on from there.

You can come up with all excuses, of course Robina has all the advantages, but maybe you’d like to focus the story of entrepreneurship is about his father and not her as she pointed out. So what’s your excuse naman that the elder Gokongwei has what advantages that you don’t have?

Someone famously said (and this is about immigrant workers in the US) something like ‘If someone who came to this country who doesn’t know anybody, doesn’t speak the language and he got your job, you must be a big loser’

Entrepreneurship is definitely not for everyone. Just like not everyone can be a doctor, engineer or a driver. But as an entrepreneur in the Philippines and Dubai there were times when I doubted myself (lets not be naive). But what I found common among entrepreneurs are their risk taking abilities and the desire and drive to succeed in what we do.

My family was not exactly in the middle income bracket, a few times during my childhood I remembered asking my mother what we’ll eat for dinner and the reply was “hindi ko alam” but not because she didn’t know what to cook but because she didn’t have the money to buy anything.

As an OFW, we often are proud to say that the Filipinos are very talented, trustworthy, hard worker and can communicate very well. All of those traits are true. So my message is:

Let’s harness those traits and add a lot of “lakas ng loob” and we could have a Filipino company that many other nationality would envy and admire.

I definitely learned something new from her speech. Nakarelate me dun sa hanap ng hanap ng job coz im 30 y/o and just had my 4th job in a callcenter industry. But I’ll still plan on transferring ;o) but di ko na paabutin ng mas marami pa dun… soon I’ll stay on 1 company, I’ll save and start a business as well in our province. Thanks Robina G. More power to this website!!!

It’s inspiring to hear thoughts from people beyond Gen Y, and I am constantly reminded how to value humility and persistence. Just the other day I met this family man of 8 kids, who opened an ice cream store in Maginhawa, QC simply because he wanted to share the joy he gets from eating the ice cream his grandfather made!

Read the other comments. I just want to share that perhaps for Gen Y “entreprenuers” are now also expressed as “inventors,” “originators” and “influencers” :) these are individuals that aim to bring something into existence whether it be a business/enterprise, an endeavor, or even an idea/culture :)

I once worked as a food scientist for URC and I tell you, the Gokongweis are not to be trifled with when it comes to management practices. I’ve yet to see a better managed company than URC (well, the whole of JGS for that matter)